Apple stock falls 10% after disappointing earnings report

Apple's stock opened trading Thursday down $55.27, or 10.75%, to $458.73 as investors reacted to a first-quarter earnings report that was deemed disappointing and the company's reduced outlook for growth.

The trend confirmed the beating Apple's stock in after-hours trading Wednesday, when shares are much more thinly traded.

The stock had closed Wednesday before the earnings report was released at $514.01. After the earnings report was released, showing record revenue but flattening profits, the stock was pummeled in after-hours trading that drove it down $54.24, or 10.55%, to $459.76.

In terms of the first quarter ending in December, analysts expressed disappointment the company only sold 47.8 million iPhones, short of the 50 million many had hoped.

More troubling, though, was the company's projection that it would post $41 billion to $43 billion in revenue for the current quarter that ends in March. That compares to the $39.2 billion it posted for the same quarter last year.

In a note to clients, BTIG research analyst Walter Piecyk said he was reducing his outlook for the company. Piecyk said analysts in general had been reducing the outlook for Apple's current fiscal year since last summer. And the latest guidance from Apple is likely to lead to further reductions and put the stock under pressure.

"The company’s dire guidance for the March quarter is likely to accelerate the pace of those revisions," Piecyk wrote. "We are cutting our FY 2013 EPS by $3 to $43, which would reflect a decline in EPS compared to last year’s record setting results. Even more startling is the company’s own guidance for the March quarter, which implies a 17%-25% contraction in EPS. That is not a great way to achieve a higher multiple."

Even Topeka Capital's Brian White, who held tight to his projection that Apple's stock would hit $1,111 this year even as it plunged in recent months, finally decided to reduce his price target to $888.

Gene Munster, an analyst at Piper Jaffray, also lowered his price target for the company's stock to $767 from $875. Munster had cut that target from $910 just two weeks ago. However, he writes that he remains optimistic about Apple's future:

"We are buyers of Apple on the pull back following the company's December quarter earnings report based on our belief that street numbers will be adequately reset and investors will return to the stock once the potential of new products comes into focus over the next three to six months. While we are adjusting our price target to $767, we remain optimistic about shares of Apple."